McKinney/Pearl Restaurant Partners LP v. CB Richard Ellis Inc, et al
Filing
189
MEMORANDUM OPINION AND ORDER: The Court GRANTS in part and DENIES in part Defendants' Second Motion to Compel [Dkt. No. 143 ] and GRANTS in part and DENIES in part Plaintiff's Second Motion to Compel and to Enforce Compliance with the Co urts Prior Order on First Motion to Compel [Dkt. No. 150 ]. All amended or supplemental interrogatory answers and document productions required by this order must be served on the opposing party's counsel by June 3, 2016. (Ordered by Magistrate Judge David L Horan on 5/25/2016) (mcrd)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MCKINNEY/PEARL RESTAURANT
PARTNERS, L.P.,
Plaintiff,
V.
METROPOLITAN LIFE INSURANCE
COMPANY, CBRE, INC., and MCPP
2100 MCKINNEY, LLC,
Defendants.
§
§
§
§
§
§
§
§
§
§
§
§
No. 3:14-cv-2498-B
MEMORANDUM OPINION AND ORDER
Defendants Metropolitan Life Insurance Company (“MetLife”), CBRE, Inc.
(“CBRE”), and MCPP 2100 McKinney, LLC (“MCPP”; collectively, with MetLife and
CBRE, “Defendants”) have filed a Second Motion to Compel [Dkt. No. 143]
(“Defendants’ Second MTC”), seeking an order under Federal Rule of Civil Procedure
37(a) to require Plaintiff McKinney/Pearl Restaurant Partners, L.P. d/b/a Sambuca
(“Plaintiff” or “Sambuca”) to (1) produce documents improperly withheld as privileged;
(2) produce documents relating to appraisals and valuations in response to certain
document requests; and (3) provide complete answers to certain interrogatories.
United States District Judge Jane J. Boyle referred Defendants’ Second MTC
to the undersigned United States magistrate judge for determination. See Dkt. No. 145.
Plaintiff filed a response, see Dkt. No. 174, and Defendants filed a reply, see Dkt.
No. 182.
-1-
Plaintiff also filed its Second Motion to Compel and to Enforce Compliance with
the Court’s Prior Order on First Motion to Compel [Dkt. No. 150] (“Plaintiff’s Second
MTC”), seeking an order under Federal Rules of Civil Procedure 37(a) and 37(b)
requiring Defendants to produce documents improperly withheld as privileged and/or
attorney work product and enforcing the Court’s previous order on Plaintiff’s first
Motion to Compel, with which Plaintiffs assert that Defendants have failed and/or
refused to comply.
Judge Boyle referred Plaintiff’s Second MTC to the undersigned for
determination. See Dkt. No. 152.
Defendants filed a response, see Dkt. No. 172, and Plaintiff filed a reply, see Dkt.
No. 181.
The Court heard oral argument on these motions on May 23, 2016. See Dkt. No.
186.
For the reasons and to the extent explained below, the Court GRANTS in part
and DENIES in part Defendants’ Second Motion to Compel [Dkt. No. 143] and
GRANTS in part and DENIES in part Plaintiff’s Second Motion to Compel and to
Enforce Compliance with the Court’s Prior Order on First Motion to Compel [Dkt. No.
150].1
Under § 205(a)(5) of the E-Government Act of 2002 and the definition of
“written opinion” adopted by the Judicial Conference of the United States, this is a
“written opinion[] issued by the court” because it “sets forth a reasoned explanation for
[the] court’s decision.” It has been written, however, primarily for the parties, to decide
issues presented in this case, and not for publication in an official reporter, and should
be understood accordingly.
1
-2-
Background
The Court has previously summarized the background and allegations in this
case based on Plaintiff’s Third Amended Complaint, which will be recounted only in
part here. See Dkt. No. 25 at 2-6.
Plaintiff “brings this action against Defendants based on MetLife’s alleged
deliberate and ongoing failure to fulfill its obligations under a commercial lease
agreement and Defendants’ repeated misrepresentations in furtherance of their
scheme to drive Sambuca out of the leased premises, resulting in repeated and
continuing injury to Sambuca.” Id. at 2 (internal quotation marks omitted). Plaintiff
“is a Texas limited partnership operating a restaurant at 2120 McKinney Avenue in
Dallas, Texas. On October 6, 2003, Sambuca entered into a lease agreement (the
‘Lease’) with 2100 Partners, L.P. for a space of approximately 9,000 square feet located
at 2120 McKinney Avenue in Dallas, Texas (the ‘Leased Premises’). The Lease was for
a ten-year term and provided for two five-year renewal options. Sambuca avers that
‘[s]hortly after entering the Lease, 2100 Partners, L.P. sold the Leased Premises to
MetLife, who assumed the ‘Landlord’ obligations under the Lease. Sambuca explains
that MetLife contracted with CBRE to serve as property manager of the Leased
Premises.” Id. (citations and internal quotation marks omitted).
Plaintiff “asserts that MetLife has refused to remedy the flawed and shifting
structure in spite of its obligations under the Lease. Sambuca further maintains that
both Defendants actively hid information from Sambuca and made repeated
representations and assurances that the structural issues would be addressed,
-3-
knowing that Sambuca would rely on these representations. Additionally, Sambuca
alleges that it has been the target of a concerted and wrongful attempt by Defendants
to drive it out of the Leased Premises through purposeful delay and deception.” Id. at
4-5 (citations and internal quotation marks omitted). “Accordingly, Sambuca asserts
the following causes of action against Defendants: (1) breach of contract; (2)
repudiation or anticipatory breach of contract; (3) breach of the warranty of quiet
enjoyment; (4) fraud; (5) negligent misrepresentation; (6) civil conspiracy; and (7)
aiding and abetting. Additionally, Sambuca demands: (1) specific performance; (2)
declaratory judgment; and (3) rescission of the Lease renewal. Sambuca specifies that
it seeks compensatory and exemplary damages, as well as attorneys’ fees, costs, and
interest. ” Id. at 5 (citations omitted).
Plaintiff has also explained that, on December 8, 2015, it discovered that the
ownership of the Leased Premises (together with the neighboring office tower) had
changed and that MetLife no longer owned the property, when MetLife sold and
transferred its interest in the Leased Premises to MCPP. Plaintiff has since, with the
Court’s leave, filed a Fourth Amended Complaint to add MCPP as a defendant. See
Dkt. Nos. 117, 119, & 120.
In support of their Second MTC, Defendants assert that, “[n]otwithstanding
Sambuca’s claim that Defendants have cost the restaurant millions of dollars, Sambuca
refuses to produce documents relating to valuations and appraisals of the restaurant
holding company and its affiliates” and “also refuses to answer basic interrogatories
and seeks to shield discoverable communications between non-attorneys with an
-4-
untenable privilege claim.” Dkt. No. 143 at 1. Defendants ask the Court to order
Sambuca to produce the documents that it has improperly withheld as privileged,
where Defendants assert that Sambuca has withheld almost 200 non-attorney
documents and communications merely because they relate to the subject matter of the
litigation; overrule Sambuca’s objections to MetLife’s First Requests for Production
(“RFP”) No. 15, Second RFP No. 6, and Fourth RFP Nos. 9 and 10 and order Sambuca
to produce responsive documents; overrule Sambuca’s objections to MetLife’s First
Interrogatories Nos. 12 and 15 and CBRE’s First Interrogatories Nos. 1 and 3-8 and
order Sambuca to fully answer each of the interrogatories; and order Sambuca to pay
Defendants’ costs and attorneys’ fees incurred in bringing Defendants’ Second MTC.
In response, Plaintiff reports that, “[i]n an effort to avoid further dispute,
Sambuca has produced the valuation-related documents and is withdrawing some
privilege assertions and producing those documents.” Dkt. No. 174 at 1 (footnote
omitted). Plaintiff otherwise responds that, “[a]s for the remaining disputed
documents, the work-product doctrine protects these documents because they were
created by Sambuca in anticipation of litigation”; that “Sambuca did not waive the
attorney-client privilege by sharing communications with ‘third parties’ because those
‘third parties’ were client representatives within the scope of the attorney-client
privilege”; and that “Sambuca’s interrogatory responses and objections are sufficient
and complete.” Id. at 1-2.
In reply, Defendants report that, after reviewing the additional information that
Plaintiff provided in support of its privilege claims, Defendants are withdrawing their
-5-
objections to Plaintiff’s privilege claims as to certain documents. See Dkt. No. 182 at
1 n.2. Defendants otherwise reply that Sambuca has failed to establish that the
documents still at issue were created in anticipation of litigation; that Sambuca
improperly claims attorney-client privilege under the “common interest” doctrine for
documents that it shared with third parties; and that Sambuca still refuses to provide
complete answers to Defendants’ interrogatories.
In its Second MTC, Plaintiff asserts that Defendants are improperly withholding
hundreds of documents based on conclusory assertions of privilege and have failed
and/or refused to comply with the Court’s January 8, 2016 Memorandum Opinion and
Order [Dkt. No. 100], granting in part and denying in part Plaintiff’s first Motion to
Compel [Dkt. No. 77]. Plaintiff explains that “Defendants have recently, near the very
end of the discovery period, produced nearly twelve thousand pages of documents that
the Court previously compelled, and did so only after Sambuca painstakingly provided
Defendants with particular examples of categories of documents that were missing
from Defendants’ previous document productions.” Dkt. No. 150 at 1. According to
Plaintiff, “[t]his provides a striking illustration of the gross deficiencies in Defendants’
document production generally, and in Defendants’ efforts, or lack thereof, to comply
with this Court’s Order in particular,” and Plaintiff therefore “further requests that the
Court enter an Order requiring Defendants to immediately and fully comply with the
Court’s prior Order.” Id. at 1-2.
Defendants respond that Plaintiff only filed its Second MTC in retaliation for
Defendants’ filing their Second MTC and that, in doing so, Plaintiff is challenging
-6-
nearly 800 documents on Defendants’ privilege logs. Defendants report that, while they
limited their Second MTC to documents claimed as work product despite the absence
of any attorney listed as a recipient of the documents, Sambuca challenged every
document on Defendants’ privilege log, outside of a handful of emails that were sent
to or received by Defendants’ outside trial counsel. Defendants further contend that
they “had already agreed to the only relief Sambuca ever requested in conferring on
privilege issues – namely, to supplement their privilege logs with additional details”
– and that, “[h]ad Sambuca waited to see Defendants’ supplemental privilege logs
instead of filing a retaliatory Motion to Compel, Sambuca would have seen that
virtually every document it challenges is a communication with Defendants’ in-house
or outside counsel providing legal advice relating to the subject matter of this
litigation.” Dkt. No. 172 at 1.
Defendant also respond that the Court should reject Plaintiff’s request seeking
a copy of Defendants’ real estate management accounting system as well as an order
for Defendants to produce some unspecified additional documents that Sambuca
speculates may exist. According to Defendants, Sambuca never requested and is not
entitled to Defendants’ complete accounting system; Defendants have already produced
responsive documents and electronically stored information (“ESI”) from this system;
and Sambuca is not entitled to an order compelling Defendants to conduct some
unspecified additional document collection or production, where, contrary to Sambuca’s
accusations, Defendants have fully complied with the Court’s prior order and produced
all responsive documents.
-7-
Defendants ask the Court to deny Plaintiff’s Second MTC and order Sambuca
to pay Defendants’ costs and attorneys’ fees incurred in responding to Plaintiff’s Second
MTC.
Plaintiff replies that it did not raise its concerns with Defendants’ privilege logs
in retaliation, but, rather, Sambuca’s counsel has repeatedly advised Defendants’
counsel that their privilege logs with respect to in-house counsel and other internal
communications was devoid of information sufficient to allow Sambuca to evaluate the
privilege claims. According to Plaintiff, Defendants’ declarations submitted in support
of its privilege and work-product claims do not establish that the challenged documents
are protected work product or attorney-client privileged communications, and
Defendants cannot use in-house counsel to hide communications that would otherwise
be discoverable. Plaintiff further contends that Defendants did not comply with this
Court’s January 8, 2016 Memorandum Opinion and Order [Dkt. No. 100], which
compelled Defendants to produce certain responsive documents by January 29, 2016,
and that “the fact that Defendants failed to even search for the nearly twelve thousand
pages of documents responsive to both Sambuca’s requests and this Court’s Order
shows that Defendants’ position in the Response is tenuous at best.” Dkt. No. 181 at
3.
Legal Standards
Federal Rule of Civil Procedure 37(a) governs motions to compel discovery
responses. Rule 37(a)(3)(B) provides that a party seeking discovery may move for an
order compelling production against another party when the latter has failed to
-8-
produce documents requested under Federal Rule of Civil Procedure 34 or to answer
interrogatories under Federal Rule of Civil Procedure 33. See FED. R. CIV. P.
37(a)(3)(B)(iii)-(iv).
The party resisting discovery must show specifically how each discovery request
is not relevant or otherwise objectionable. See McLeod, Alexander, Powel & Apffel, P.C.
v. Quarles, 894 F.2d 1482, 1485 (5th Cir. 1990). In response to a Rule 34 request, “[f]or
each item or category, the response must either state that inspection and related
activities will be permitted as requested or state with specificity the grounds for
objecting to the request, including the reasons.” FED. R. CIV. P. 34(b)(2)(B). “An
objection must state whether any responsive materials are being withheld on the basis
of that objection. An objection to part of a request must specify the part and permit
inspection of the rest.” FED. R. CIV. P. 34(b)(2)(C). And, in response to an interrogatory
under Rule 33, “[e]ach interrogatory must, to the extent it is not objected to, be
answered separately and fully in writing under oath”; “[t]he grounds for objecting to
an interrogatory must be stated with specificity”; and “[a]ny ground not stated in a
timely objection is waived unless the court, for good cause, excuses the failure.” FED.
R. CIV. P. 33(b)(3)-(4).
A party resisting discovery must show how the requested discovery was overly
broad, burdensome, or oppressive by submitting affidavits or offering evidence
revealing the nature of the burden. See Merrill v. Waffle House, Inc., 227 F.R.D. 475,
477 (N.D. Tex. 2005); see also S.E.C. v. Brady, 238 F.R.D. 429, 437 (N.D. Tex. 2006) (“A
party asserting undue burden typically must present an affidavit or other evidentiary
-9-
proof of the time or expense involved in responding to the discovery request.”). And the
“party asserting a privilege exemption from discovery bears the burden of
demonstrating its applicability.” In re Santa Fe Int’l Corp., 272 F.3d 705, 710 (5th Cir.
2001).
A party who has objected to a discovery request must, in response to a motion
to compel, urge and argue in support of his objection to a request, and, if he does not,
he waives the objection. See Dolquist v. Heartland Presbytery, 221 F.R.D. 564, 568 (D.
Kan. 2004); Cotracom Commodity Trading Co. v. Seaboard Corp., 189 F.R.D. 655, 662
(D. Kan. 1999).
The Court has previously explained the standards governing the parties’ claims
of attorney-client privilege in this diversity case:
This Court sitting in this diversity case applies the Texas attorney-client
privilege. Under Texas law, the elements of the attorney-client privilege
are: (1) a confidential communication; (2) made for the purpose of
facilitating the rendition of professional legal services; (3) between or
amongst the client, lawyer, and their representatives; and (4) the
privilege has not been waived. The burden is on the party asserting the
privilege to demonstrate how each document satisfies these elements. A
general allegation of privilege is insufficient to meet this burden. Instead,
the proponent must provide sufficient facts by way of detailed affidavits
or other evidence to enable the court to determine whether the privilege
exists. Although a privilege log and an in camera review of documents
may assist the court in conducting its analysis, a party asserting the
privilege still must provide “a detailed description of the materials in
dispute and state specific and precise reasons for their claim of protection
from disclosure.” In fact, “resort to in camera review is appropriate only
after the burdened party has submitted detailed affidavits and other
evidence to the extent possible.”
Curlee v. United Parcel Serv., Inc. (Ohio), No. 3:13-cv-344-P, 2014 WL 4262036, at *4
(N.D. Tex. Aug. 29, 2014) (citations omitted).
-10-
The Texas Supreme Court has recognized that privileges “represent society’s
desire to protect certain relationships.” Republic Ins. Co. v. Davis, 856 S.W.2d 158, 163
(Tex. 1983). “It is the rule in Texas that the protections afforded by a privilege are
waived by voluntary disclosure of the privileged documents.” Jordan v. Court of
Appeals for Fourth Supreme Judicial Dist., 701 S.W.2d 644, 649 (Tex. 1985). More
specifically,
[u]nder Texas law, the attorney-client privilege prohibits disclosure of
confidential communications made for the purpose of facilitating the
rendition of professional legal services to the client. Tex. R. Evid.
503(b)(1). The privilege can be claimed by the client, or by the attorney
on the client’s behalf. TEX. R. EVID. 503(c). Generally, the voluntary
disclosure of privileged communications to a third party results in a
waiver of the privilege. TEX. R. EVID. 511. There is an exception to this
rule, however, found in Tex. R. Evid. 503(b)(1)(C). This exception protects
confidential communications made for the purpose of
facilitating the rendition of professional legal services ... by
the client or a representative of the client, or the client’s
lawyer or a representative of the lawyer, to a lawyer or a
representative of a lawyer representing another party in a
pending action and concerning a matter of common interest
therein.
TEX. R. EVID. 503(b)(1)(C).
Klein v. Fed. Ins. Co., No. 7:03-cv-102-D, 2014 WL 3408355, at *8-*9 (N.D. Tex. July
14, 2014) (footnotes omitted). “Although it is sometimes referred to as the ‘joint
defense’ privilege, see In re XL Specialty Ins. Co., 373 S.W.3d 46, 50-51 (Tex. 2012),
Tex. R. Evid. 503(b)(1)(C) does not create an independent privilege, but rather an
exception to the general rule that no attorney-client privilege attaches to
communications that are made in the presence of or disclosed to a third party.” Id. at
*8 n.19 (internal quotation marks omitted). In In re XL Specialty Insurance Co., 373
-11-
S.W.3d 46 (Tex. 2012), the Texas Supreme Court made clear that Texas law on the socalled common-interest or joint-defense doctrine “requires that the communications be
made in the context of a pending action,” provides that “no commonality of interest
exists absent actual litigation,” and, accordingly, provides that the exception to the
general rule under Texas law “is not a ‘common interest’ privilege that extends beyond
litigation” and is not “a ‘joint defense’ privilege, as it applies not just to defendants but
to any parties to a pending action.” 373 S.W.3d at 51-52 (footnotes omitted). Rather,
“Rule 503(b)(1)(C)’s privilege is more appropriately termed an ‘allied litigant’ privilege,”
“protects communications made between a client, or the client’s lawyer, to another
party’s lawyer, not to the other party itself,” and “applies only when the parties have
separate counsel.” Id. at 52-53.
Texas Rule of Evidence 503(d)(5) sets forth the joint-client exception to the
attorney-client privilege. The rule states that “the privilege does not apply if the
communication (1) is offered in an action between clients who retained or consulted the
same lawyer; (2) was made by any of the clients to the lawyer; and (3) is relevant to a
matter of common interest between the clients.” TEX. R. EVID. 503(d)(5). “Thus, the rule
contemplates that when a communication relevant to a common matter between two
clients is requested in discovery, the attorney-client privilege remains intact as to each
client unless the suit is between the joint clients.” In re Unitrin Cty. Mut. Ins. Co., No.
03-10-00384-CV, 2010 WL 2867326, at *3 (Tex. App. – Austin, July 22, 2010, orig.
proceeding).
Likewise, the following standards govern the parties’ assertions of work-product
-12-
protection over certain documents:
[T]he issue of whether documents are exempt from discovery under the
attorney work product doctrine is governed by federal law in diversity
cases because work product is not a substantive privilege within the
meaning of Federal Rule of Civil Procedure 501. The federal work product
doctrine, as codified by Federal Rule of Civil Procedure 26(b)(3), provides
for the qualified protection of documents and tangible things prepared by
or for a party or that party’s representative “in anticipation of litigation
or for trial.” A document need not be generated in the course of an
ongoing lawsuit in order to qualify for work product protection. But “the
primary motivating purpose” behind the creation of the document must
be to aid in possible future litigation. As the advisory committee notes to
Rule 26(b)(3) make clear, “[m]aterials assembled in the ordinary course
of business, or pursuant to public requirements unrelated to litigation, or
for other nonlitigation purposes are not under the qualified immunity
provided by this subdivision.”
Among the factors relevant to determining the primary motivation
for creating a document are “‘the retention of counsel and his involvement
in the generation of the document and whether it was a routine practice
to prepare that type of document or whether the document was instead
prepared in response to a particular circumstance.’” If the document
would have been created without regard to whether litigation was
expected to ensue, it was made in the ordinary course of business and not
in anticipation of litigation.
Like all privileges, the work product doctrine must be strictly
construed. The burden is on the party who seeks work product protection
to show that the materials at issue were prepared by its representative
in anticipation of litigation or for trial. A general allegation of work
product protection is insufficient to meet this burden. Instead, “‘a clear
showing must be made which sets forth the items or categories objected
to and the reasons for that objection.’” The proponent must provide
sufficient facts by way of detailed affidavits or other evidence to enable
the court to determine whether the documents constitute work product.
Although a privilege log and an in camera review of documents may
assist the court in conducting its analysis, a party asserting the work
product exemption still must provide “a detailed description of the
materials in dispute and state specific and precise reasons for their claim
of protection from disclosure.” In fact, “‘resort to in camera review is
appropriate only after the burdened party has submitted detailed
affidavits and other evidence to the extent possible.’”
Orchestrate HR, Inc. v. Trombetta, No. 3:13-cv-2110-P, 2014 WL 884742, at *2 (N.D.
-13-
Tex. Feb. 27, 2014) (citations omitted).
“If a party meets its burden and proves that the materials sought warrant work
product protection, the party seeking discovery must prove why those materials should
still be produced.” Brady, 238 F.R.D. at 443. Rule 26(b)(3) instructs the court to
“protect against disclosure of the mental impressions, conclusions, opinions, or legal
theories of an attorney or other representative of a party concerning the litigation.”
FED. R. CIV. P. 26(b)(3). A party may only obtain discovery of documents prepared in
anticipation of litigation or for trial upon showing that the party seeking discovery has
(1) substantial need of the materials to prepare for his or her case and (2) that the
party cannot obtain the substantial equivalent of the materials by other means without
undue hardship. See id. And the work-product rule accords “special protection to workproduct revealing the attorney’s mental processes.” Upjohn Co. v. United States, 449
U.S. 383, 400 (1981). As such, “if the materials sought are opinion work-product then
a court may compel discovery only if the party seeking the materials demonstrates a
compelling need for the information.” Brady, 238 F.R.D. at 443; accord S.E.C. v.
Cuban, No. 3:08-cv-2050-D, 2012 WL 456532, at *2 & n.3 (N.D. Tex. Feb. 10, 2012).
The work-product doctrine is very different from the attorney-client privilege
with regard to possible waiver. Although the attorney-client privilege exists to protect
the confidential communications between an attorney and client and, thus, is generally
waived by disclosure of confidential communications to third parties, the work product
protection exists to “promote the adversary system by safeguarding the fruits of an
attorney’s trial preparations from the discovery attempts of an opponent.” Shields v.
-14-
Sturm, Ruger & Co., 864 F.2d 379, 382 (5th Cir. 1989). “Therefore, the mere voluntary
disclosure to a third person is insufficient in itself to waive the work product privilege.”
Id. Such a disclosure only waives the work product privilege if it is given to adversaries
or is “treated in a manner that substantially increases the likelihood that an adversary
will come into possession of the material.” Advance Technology Incubator, Inc. v. Sharp
Corp., 2009 WL 4432569, at *2 (E.D. Tex. 2009) (citing Ferko v. NASCAR, 219 F.R.D.
396, 400-01 (E.D. Tex. 2003); Brady, 238 F.R.D. at 444)). And, “[u]nlike the attorneyclient privilege, the burden of proving waiver of work product immunity falls on the
party asserting waiver.” Brady, 238 F.R.D. at 444.
Federal Rules of Civil Procedure Rules 26(b) and 26(c) have been amended,
effective December 1, 2015. Rule 26(b)(1) now provides that, “[u]nless otherwise limited
by court order, the scope of discovery is as follows: Parties may obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim or defense and
proportional to the needs of the case, considering the importance of the issues at stake
in the action, the amount in controversy, the parties’ relative access to relevant
information, the parties’ resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed discovery outweighs its
likely benefit. Information within this scope of discovery need not be admissible in
evidence to be discoverable.” FED. R. CIV. P. 26(b)(1).
The amendments to Rules 26 and 34 govern in all proceedings in civil cases
thereafter commenced and, insofar as just and practicable, in all proceedings then
pending. The Court finds that applying the standards of Rules 26 and 34, as amended,
-15-
to Defendants’ Second MTC and Plaintiff’s Second MTC is both just and practicable.
Further, for the reasons the Court has recently explained, the Court concludes
that the amendments to Rule 26 do not alter the burdens imposed on the party
resisting discovery discussed above. See Carr v. State Farm Mutual Automobile
Insurance Company, 312 F.R.D. 459, 463-69 (N.D. Tex. 2015). Rather, just as was the
case before the December 1, 2015 amendments, under Rules 26(b)(1) and
26(b)(2)(C)(iii), a court can – and must – limit proposed discovery that it determines
is not proportional to the needs of the case, considering the importance of the issues
at stake in the action, the amount in controversy, the parties’ relative access to
relevant information, the parties’ resources, the importance of the discovery in
resolving the issues, and whether the burden or expense of the proposed discovery
outweighs its likely benefit – and the court must do so even in the absence of a motion.
See Crosby v. La. Health Serv. & Indem. Co., 647 F.3d 258, 264 (5th Cir. 2011). Thus,
as amended, Rule 26(b)(2)(C) provides that, “[o]n motion or on its own, the court must
limit the frequency or extent of discovery otherwise allowed by these rules or by local
rule if it determines that: (i) the discovery sought is unreasonably cumulative or
duplicative, or can be obtained from some other source that is more convenient, less
burdensome, or less expensive; (ii) the party seeking discovery has had ample
opportunity to obtain the information by discovery in the action; or (iii) the proposed
discovery is outside the scope permitted by Rule 26(b)(1).” FED. R. CIV. P. 26(b)(2)(C).
But a party seeking to resist discovery on these grounds still bears the burden
of making a specific objection and showing that the discovery fails the proportionality
-16-
calculation mandated by Rule 26(b) by coming forward with specific information to
address – insofar as that information is available to it – the importance of the issues
at stake in the action, the amount in controversy, the parties’ relative access to
relevant information, the parties’ resources, the importance of the discovery in
resolving the issues, and whether the burden or expense of the proposed discovery
outweighs its likely benefit.
The party seeking discovery, to prevail on a motion to compel, may well need to
make its own showing of many or all of the proportionality factors, including the
importance of the issues at stake in the action, the amount in controversy, the parties’
relative access to relevant information, the parties’ resources, and the importance of
the discovery in resolving the issues, in opposition to the resisting party’s showing.
And the party seeking discovery is required to comply with Rule 26(b)(1)’s
proportionality limits on discovery requests; is subject to Rule 26(g)(1)’s requirement
to certify “that to the best of the person’s knowledge, information, and belief formed
after a reasonable inquiry: ... (B) with respect to a discovery request..., it is: (i)
consistent with these rules and warranted by existing law or by a nonfrivolous
argument for extending, modifying, or reversing existing law, or for establishing new
law; (ii) not interposed for any improper purpose, such as to harass, cause unnecessary
delay, or needlessly increase the cost of litigation; and (iii) neither unreasonable nor
unduly burdensome or expensive, considering the needs of the case, prior discovery in
the case, the amount in controversy, and the importance of the issues at stake in the
action”; and faces Rule 26(g)(3) sanctions “[i]f a certification violates this rule without
-17-
substantial justification.” FED. R. CIV. P. 26(g)(1)(B), 26(g)(3); see generally Heller v.
City of Dallas, 303 F.R.D. 466, 475-77, 493-95 (N.D. Tex. 2014).
But the amendments to Rule 26(b) do not alter the basic allocation of the burden
on the party resisting discovery to – in order to successfully resist a motion to compel
– specifically object and show that the requested discovery does not fall within Rule
26(b)(1)’s scope of relevance (as now amended) or that a discovery request would
impose an undue burden or expense or is otherwise objectionable. See McLeod, 894
F.2d at 1485; Heller, 303 F.R.D. at 483-93.
Federal Rule of Civil Procedure 37(a)(5)(A) provides that, if a motion to compel
is granted, or if the requested discovery is provided after the motion was filed, “the
court must, after giving an opportunity to be heard, require the party ... whose conduct
necessitated the motion, the party or attorney advising that conduct, or both to pay the
movant’s reasonable expenses incurred in making the motion, including attorney’s
fees,” except that “the court must not order this payment if: (I) the movant filed the
motion before attempting in good faith to obtain the disclosure or discovery without
court action; (ii) the opposing party’s nondisclosure, response, or objection was
substantially justified; or (iii) other circumstances make an award of expenses unjust.”
FED. R. CIV. P. 37(a)(5)(A).
Federal Rule of Civil Procedure 37(a)(5)(B)-(C) further provides in pertinent part
that, “[i]f the motion is denied, the court may issue any protective order authorized
under Rule 26(c) and must, after giving an opportunity to be heard, require the
movant, the attorney filing the motion, or both to pay the party ... who opposed the
-18-
motion its reasonable expenses incurred in opposing the motion, including attorney’s
fees,” “[b]ut the court must not order this payment if the motion was substantially
justified or other circumstances make an award of expenses unjust,” and that, “[i]f the
motion is granted in part and denied in part, the court may issue any protective order
authorized under Rule 26(c) and may, after giving an opportunity to be heard,
apportion the reasonable expenses for the motion.” FED. R. CIV. P. 37(a)(5)(B)-(C).
Federal Rule of Civil Procedure 37(b)(2)(A) provides that, “[i]f a party ... fails to
obey an order to provide or permit discovery ... the court where the action is pending
may issue further just orders,” including, among other sanctions, directing that
matters embraced in the order or other designated facts be taken as true, prohibiting
the disobedient party from introducing designated matters in evidence, and/or staying
further proceedings until the order is obeyed. FED. R. CIV. P. 37(b)(2)(A)(i)-(vi).
Sanctions available under Rule 37(b) are appropriate where there is willful
disobedience or gross indifference but not where failure to comply was outside the
party’s control. See Dorsey v. Acad. Moving & Storage, Inc., 423 F.2d 858, 860 (5th Cir.
1970). Rule 37(b)(2)(C) further requires that, “[i]nstead of or in addition to the orders
[described under Rule 37(b)(2)(A)], the court must order the disobedient party, the
attorney advising that party, or both to pay the reasonable expenses, including
attorney’s fees, caused by the failure, unless the failure was substantially justified or
other circumstances make an award of expenses unjust.” FED. R. CIV. P. 37(b)(2)(C).
-19-
Analysis
I.
Defendants’ Second MTC
A.
MetLife’s Second Requests for Production (“RFP”) No. 6; MetLife’s First
RFP No. 15; MetLife’s Fourth RFP Nos. 9 & 10
In its response to Defendants’ Second MTC, Plaintiff represents that it produced
all the documents about which Defendants complain and thus withdraws its objections
to these requests, and, at oral argument, Plaintiff’s counsel assured the Court and
Defendants’ counsel that Plaintiff has produced all non-privileged documents
responsive to MetLife’s Second RFP No. 6; MetLife’s First RFP No. 15; and MetLife’s
Fourth RFP Nos. 9 and 10 and is not withholding any documents based on any
distinction between Sambuca and Restaurant Expert Management, Inc. (“REM, Inc.”),
an affiliated management company of Sambuca. Accordingly, the Court DENIES
Defendants’ Second MTC as moot as to these document requests, subject to Plaintiff’s
ongoing supplementation obligations under Federal Rule of Civil Procedure 26(e).
B.
MetLife’s First Set of Interrogatories No. 12
This interrogatory asks Plaintiff to identify the details of each false and
deceptive representation or statement that Plaintiff alleges in its complaint. Plaintiff
objects that it cannot answer more fully than it already has to the best of its ability
because of the nature of the “string-along” fraud that Plaintiff alleges.
The Court determines that this is not an impermissible request to require
Plaintiff to marshal its evidence for trial and overrules Plaintiff’s objections to this
interrogatory. At the end of discovery, in a case in which Plaintiff alleges that
-20-
Defendants made false and deceptive representations and statements, this is a
reasonable request. To the extent that it has not already done so, Plaintiff must amend
its answer to identify the requested details of any allegedly false and deceptive
affirmative representation or statement on which Plaintiff will rely in support of its
claims against Defendants. Any amended answer may rely in part on Federal Rule of
Civil Procedure 33(d), as Plaintiff already has, so long as Plaintiff only points to
specific documents, by name or bates number.
C.
MetLife’s First Set of Interrogatories No. 15
Plaintiff’s has objected on vagueness grounds and then answered Interrogatory
No. 15 by pointing Defendants to documents produced and expert reports served in this
case. In doing so, Plaintiff relies on Rule 33(d), which provides that, “[i]f the answer to
an interrogatory may be determined by examining, auditing, compiling, abstracting,
or summarizing a party’s business records (including electronically stored information),
and if the burden of deriving or ascertaining the answer will be substantially the same
for either party, the responding party may answer by: (1) specifying the records that
must be reviewed, in sufficient detail to enable the interrogating party to locate and
identify them as readily as the responding party could; and (2) giving the interrogating
party a reasonable opportunity to examine and audit the records and to make copies,
compilations, abstracts, or summaries.” FED. R. CIV. P. 33(d). Thus, in relying on Rule
33(d) in an interrogatory answer, Plaintiff must specify the information that
Defendants should review in sufficient detail to enable Defendants to locate and
identify the information in the documents as readily as Plaintiff could.
-21-
The Court determines that Plaintiff’s pointing Defendants generally to document
productions and expert reports does not properly invoke Rule 33(d). Plaintiff will be
required to amend its answer to point to specific documents, by name or bates number,
and to explain its reasonable understanding of what constitutes a “test, survey, or
evaluation” as to which the interrogatory is asking. If tests, surveys, or evaluations are
performed on a regular basis, Plaintiff’s response should specify the time frame in
which the testing or evaluations are performed – and by whom – with reasonable
detail. Except as provided above, the Court overrules Plaintiff’s objections to
Interrogatory No. 15.
D.
CBRE’s First Set of Interrogatories No. 1
Plaintiff’s answer to Interrogatory No. 1 explains why Plaintiff may not have the
information that the interrogatory asks for but does not straightforwardly state that
Plaintiff does not possess the identifying information that Defendants seek. Plaintiff
must amend its answer to provide any responsive information that it has or to clearly
state that it has no responsive information. The Court overrules Plaintiff’s objections
to this interrogatory.
E.
CBRE’s First Set of Interrogatories Nos. 3-7
For the reasons explained above as to MetLife’s First Set of Interrogatories No.
15, the Court determines that Plaintiff’s pointing Defendants generally to document
productions and expert reports does not properly invoke Rule 33(d), and Plaintiff will
be required to amend its answers to Interrogatory Nos. 3, 4, 5, 6, and 7 to point to
specific documents, by name or bates number, that, in Plaintiff’s view, form the basis
-22-
for Plaintiff’s denial of the requests for admission at issue. The Court determines that
these are not impermissible requests to require Plaintiff to marshal its evidence for
trial and overrules Plaintiff’s objections to these interrogatories.
F.
CBRE’s First Set of Interrogatories No. 8
The Court overrules Plaintiff’s objections to Interrogatory No. 8, which, under
the circumstances of the case and in light of Plaintiff’s claims, reasonably asks Plaintiff
to identify “each notice [it provided] ... under the terms of the Lease.” The Court
determines that Plaintiff’s pointing Defendants generally to document productions –
including “voluminous produced communications between Sambuca and Defendants”
– does not properly invoke Rule 33(d), and Plaintiff will be required to amend its
answer to point to specific documents, by name or bates number, that, in Plaintiff’s
view, constitute a “notice by Sambuca provided to MetLife or CBRE under the terms
of the Lease.” This should at least include any such notice on which Plaintiff may rely
in support of any claim or defense in this case.
G.
Challenges to Claims of Work Product
As an initial matter, the Court notes that it declines to find any claim by
Plaintiff or Defendants of privilege or work-product protection waived based on
allegedly insufficient privilege logs under Federal Rule of Civil Procedure 26(b)(5).
Rather, the Court gave the parties the opportunity to fully support their claims of
privilege and work product in response to the pending motions to compel and will
assess the claims based on the parties’ evidence filed in support of their responses.
Defendants challenge two categories of documents on Plaintiff’s privilege log:
-23-
certain entries asserting work-product protection over documents that were not
prepared by or for an attorney preparing for litigation (Category 1), and certain entries
in which Plaintiff claims attorney-client privilege and work-product protection for
documents that it shared with third parties (Category 2).
As to Category 1, the Court need not make a determination – in light of
Plaintiff’s withdrawing its claim of work-product protection or Defendants’
withdrawing their challenge to that claim – as to Documents 7, 13, 19, 25, 27-28, 33-34,
40, 53-54, 60, 108, 124-128, 136, 141, 152-153, 157-160, and 162-164.
The Court has carefully reviewed the Affidavit of Kim Forsythe [Dkt. No. 175]
as to the remaining privilege log entries in dispute and determines that, for many of
the reasons discussed in Defendants’ reply in support of their Second MTC, Plaintiff
has failed to meet its burden to establish that the primary motivating purpose behind
the creation of the following Category 1 documents was to aid in possible future or
ongoing litigation or that the documents otherwise were prepared by Plaintiff’s
representative in anticipation of litigation as required for work-product protection:
Documents 1, 3-6, 8-12, 14-18, 22-24, 26, 29-32 35-38, 41-52, 55-56, 58-59, 61-63, 65-96,
99, 104-107, 109-112, 114, 119-120, 122-123, 129-132, 134-135, 140, 142-151, 154-156,
and 161. See Dkt. No. 144 at 5-9. Accordingly, the Court GRANTS Defendants’ motion
to compel production of these documents.
But the Court also determines that Plaintiff has met its burden to establish that
the following Category 1 documents were prepared by its representative in anticipation
of litigation and/or are otherwise privileged: Documents 2, 20-21, 39, 57, 64, 97-98, 100-24-
103, 113, 115-118, 121, 133, 137-139, and 165. See id. Accordingly, the Court DENIES
Defendants’ motion to compel production of these documents.
H.
Challenges to Claims of Attorney-Client Privilege
Defendants challenge Plaintiff’s claim of attorney-client privilege as to 23
documents consisting of communications with Plaintiff’s counsel on which Steve
Lieberman was included. (Plaintiff has withdrawn its privilege objections as to, and
will produce, Document 24 in Category 2.)
In response, Plaintiff explains that Mr. Lieberman is a minority owner of
Sambuca; that Sambuca’s discussions with Mr. Lieberman were in his capacity as an
owner of Sambuca; that Mr. Lieberman is also CEO of The Retail Connection, and
certain of The Retail Connection employees were included on some of the
communications as indicated in the Affidavit of Kim Forsythe; and that, to the extent
these employees were included on privileged communications, they were acting at the
direction of Mr. Lieberman as agents in his capacity as minority owner of Sambuca.
Plaintiff asserts that, in his capacity as owner, Mr. Lieberman is entitled to
attorney-client privilege, and his agents are entitled to the same.
Plaintiff relies on Texas Rule of Evidence 503(b), which extends the
attorney-client privilege to communications between the client’s lawyer and the client’s
representative. Under Rule 503(b), “[a] client has a privilege to refuse to disclose and
to prevent any other person from disclosing confidential communications made to
facilitate the rendition of professional legal services to the client: (A) between the client
or the client’s representative and the client’s lawyer or the lawyer’s representative; (B)
-25-
between the client’s lawyer and the lawyer’s representative; (C) by the client, the
client’s representative, the client’s lawyer, or the lawyer’s representative to a lawyer
representing another party in a pending action or that lawyer’s representative, if the
communications concern a matter of common interest in the pending action; (D)
between the client’s representatives or between the client and the client’s
representative; or (E) among lawyers and their representatives representing the same
client.” TEX. R. EVID. 503(b)(1).
Texas Rule of Evidence 503(a)(2) defines a “representative of the client” as “(A)
a person having authority to obtain professional legal services, or to act on advice
thereby rendered, on behalf of the client, or (B) any other person who, for the purpose
of effectuating legal representation for the client, makes or receives a confidential
communication while acting in the scope of employment for the client.” TEX. R. EVID.
503(a)(2). “Although the attorney-client privilege extends to communications between
‘representatives of the client,’ a party invoking the privilege must show that each
person privy to the communication: (1) had the authority to obtain professional legal
services on behalf of the client; (2) had authority to act on legal advice rendered to the
client; or (3) made or received the confidential communication while acting within the
scope of his employment for the purpose of effectuating legal representation to the
client.” Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467, 475 (N.D. Tex. 2004).
The Court determines that, through the Affidavit of Kim Forsythe [Dkt. No.
175], Plaintiff has sufficiently established that Mr. Lieberman and his employees were
making or receiving the confidential communications at issue with Plaintiff’s counsel
-26-
while acting in the scope of employment with – or, in this case, minority ownership of
– Plaintiff (or as agents of the minority owner) for the purpose of effectuating legal
representation to Plaintiff. This conclusion is not undermined by Plaintiff also having
retained The Retail Connection and Mr. Lieberman to negotiate on Plaintiff’s behalf
with Defendants. See Dkt. No. 144 at 213-214. Mr. Lieberman’s serving as Plaintiff’s
agent in any negotiation does not preclude his making or receiving confidential
communications while acting within the scope of his role as minority owner for the
purpose of effectuating legal representation to Plaintiff, even in connection with the
same negotiations.
Accordingly, Plaintiff need not (as it does not) attempt to rely on any commoninterest or allied-litigant doctrine, and the Court determines that the attorney-client
privilege as to Documents 1-23 in Category 2, see Dkt. No. 144 at 10, has not been
waived. The Court therefore DENIES Defendants’ motion to compel production of these
documents.
II.
Plaintiff’s Second MTC
A.
Compliance with Prior Order on Plaintiff’s First Motion to Compel
After carefully considering the parties’ briefing, evidence, and oral argument,
the Court determines that Plaintiff has not demonstrated that Defendants are
currently out of compliance with the Court’s January 8, 2016 Memorandum Opinion
and Order [Dkt. No. 100], granting in part and denying in part Plaintiff’s first Motion
to Compel [Dkt. No. 77]. Defendants have assured the Court that they have produced
all responsive documents and ESI, including from MetLife’s proprietary real estate
-27-
management accounting software, Management Records Incorporated (“MRI”). The
Court determines that there is no basis for any order requiring additional production
from the MRI system based on the Court’s prior order on Plaintiff’s first Motion to
Compel. Accordingly, the Court DENIES Plaintiffs’ Motion to Enforce Compliance with
the Court’s Prior Order on First Motion to Compel, subject to Defendants’ ongoing
supplementation obligations under Rule 26(e), including as to any document
production required by the Court’s January 8, 2016 Memorandum Opinion and Order
[Dkt. No. 100].
B.
Challenges to Claims of Work Product and Attorney-Client Privilege
Plaintiff challenges dozens of documents as to which Defendants assert workproduct protection because, Plaintiff alleges, they were not prepared by or for a party
or that party’s representative in anticipation of litigation or for trial. Plaintiff also
challenges dozens of documents as to which Defendants assert attorney-client privilege
because, Plaintiff alleges, they were not made for the purposes of facilitating the
rendition of professional legal services.
In response, Defendants filed and rely on the Declaration of Frederique Beky;
the Declaration of Kari Whitley Delamore; the Declaration of Richard L. Flaten, Jr.;
the Declaration of Steven Karp; the Declaration of J. Kenneth Kopf; the Declaration
of Melissa M. McNeel; the Declaration of Robin Nichol Norvell; and the Declaration of
Melayne Packer. See Dkt. No. 173. Defendants also withdrew their privilege and/or
work-product claims as to certain challenged documents. See Dkt. No. 172 at 5 n.7.
The Court determines that, insofar as documents involve communications
-28-
between MetLife’s in-house attorneys and employees of CBRE, Defendants have
established that any privilege or work-product protection is not waived because CBRE
acts as MetLife’s agent in managing the Sambuca building and because CBRE and
MetLife qualify as joint clients.
The Court also determines, after carefully reviewing the briefing and
Defendants’ evidence, that Defendants have met their burden to establish that the
challenged documents on their privilege logs, see Dkt. No. 151 at App. 1-41, are
properly withheld based on work-product protection and/or the attorney-client privilege
with the following exceptions as to which the Court determines that Defendants have
not met their burden and which Defendants will be required to disclose: MetLife’s
Supplemental Privilege Log, Documents 13, 15, 24, 5412, 5630, 9656, 10244, 10519,
501172, 501173, 501335, 501842, 501872, 501883, 501887, 502924, 503013, 503082,
503084, 503085, 503468, 503469, 503470, 503471, 503473, 503474, 503476, 503489,
503490, 503492, 503493, 503497, 503503, 503507, 503510, 503600, 503601, 503841,
503849, 503859, 503875, 503886, 503894, 503896, 503900, 503903, 600889, 601721,
601908, 602183, 603472, 603988, 604108, 606172, 606261, 606338, 606339, 606340,
606913, 606914, 606916, 606917, 606920, 606921, 606922, 606956, 606957, 606967,
606971, 606973, 606974, 607126, 607127, 607203, 607498, 607503, 607513, 607531,
607542, 607747, 607789, 607793, 900031, 900035, 900040, and 900117 and CBRE’s
Supplemental Privilege Log, Documents 35, 36, 669, 673, 675, 706, 711, 729, 730, 734,
738, 1031, 1034, 1035, 1038, 1039, 1121, 1299, 1311, 1312, 1389, 1390, 1400, 1472,
1519, 1619, 1621, 1624, 1625, 1654, 1661, 1662, 1693, 1695, 1698, 1701, 1702, 1704,
-29-
1714, 1715, 1716, 1717, 1718, 1733, 1735, 3271, 5613, 6330, 6916, 6918, 6921, 6925,
6940, 6943, 6946, 7111, 9609, 9611, 16190, 16191, 100013, 100014, and 100015.
The Court therefore GRANTS Plaintiff’s motion to compel production of the
documents listed above and otherwise DENIES Plaintiff’s Second MTC.
Plaintiff takes particular issue with documents that include or are authored by
MetLife’s Associate General Counsel Steven Karp, noting that communications with
an in-house counsel are not automatically presumed privileged or protected and that
it is particularly difficult to determine the primary purpose of communications
involving in-house counsel, who often have responsibilities that extend beyond the
mere rendering of legal advice and involve acting as a business adviser. The Court has
taken account of the extent to which Defendants’ evidence establishes the role Mr.
Karp played in connection with a particular document in making the determinations
reflected above.
III.
Requests for Award of Expenses
Under Federal Rules of Civil Procedure 37(a)(5) and 37(b), the Court determines
that, under all of the circumstances presented here, Plaintiff and Defendants should
bear their own expenses, including attorneys’ fees, in connection with Defendants’
Second MTC and Plaintiff’s Second MTC.
Conclusion
For the reasons and to the extent explained above, the Court GRANTS in part
and DENIES in part Defendants’ Second Motion to Compel [Dkt. No. 143] and
GRANTS in part and DENIES in part Plaintiff’s Second Motion to Compel and to
-30-
Enforce Compliance with the Court’s Prior Order on First Motion to Compel [Dkt. No.
150].
All amended or supplemental interrogatory answers and document productions
required by this order must be served on the opposing party’s counsel by June 3, 2016.
SO ORDERED.
DATED: May 25, 2016
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
-31-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?